III: BASIC PRINCIPLES[15] Before embarking on a consideration of the individualappeals, I believe it is necessary to restate some basic principlesthat apply to these appeals. First, of course, is the standard ofreview. There is no dispute that the standard of review to beapplied to the decisions of the Panel, in terms of the merits, isreasonableness. Insofar as the appellants have raised issues ofprocedural fairness, there is no standard of review to be applied.Instead, the court determines whether the requisite level of pro-cedural fairness has been accorded, with reference to the factorsin Baker v. Canada (Minister of Citizenship and Immigration),[1999] 2 S.C.R. 817, [1999] S.C.J. No. 39.

[16] The proper treatment of circumstantial evidence is a
more difficult issue. This case, like almost all “tipping” cases, is
largely based on circumstantial evidence. All of the appellants
submit that the Panel, in reaching its conclusions, improperly
used the circumstantial evidence, either by drawing unreasonable inferences or by drawing inferences for which there was no
evidence from which those inferences could properly be drawn.
A review of the basic principles surrounding the use of circumstantial evidence is therefore necessary.

[17] While there are any number of expressions of the basic
principle underlying circumstantial evidence, I choose the following description from R. v. Morrissey (1995), 22 O.R. (3d) 514,
[1995] O.J. No. 639 (C.A.), where Doherty J.A. said, at p. 530 O.R.:
A trier of fact may draw factual inferences from the evidence. The inferences must, however, be ones which can be reasonably and logically drawn
from a fact or group of facts established by the evidence.

[18] As is clear from the above quotation, inferences must flowfrom established facts. In other words, the evidence must estab-lish the base facts from which the inference can then be reason-ably drawn. This point is aptly made in Caswell v. PowellDuffryn Associated Collieries Ltd., [1940] A.C. 152, [1939] 3 AllE.R. 722 (H.L.), where Lord Wright said, at pp. 169-70 A.C.:There can be no inference unless there are objective facts from which toinfer the other facts which it is sought to establish. In some cases the otherfacts can be inferred with as much practical certainty as if they had beenactually observed. In other cases the inference does not go beyond reasona-ble probability. But if there are no positive proved facts from which theinference can be made, the method of inference fails and what is left is merespeculation or conjecture.

[19] On this point, it is important to remember the function of
circumstantial evidence: it is to fill an evidentiary gap created by
the fact that there is no direct evidence of a particular fact or